The Federal Reserve has just signaled a rate cut. What does this mean for the crypto market?

Simply put, liquidity is coming. A decrease in interest rates will make funding cheaper, and investors will naturally shift their focus to high-risk, high-reward assets — cryptocurrencies are obviously on that list.

Here's the logical chain: money becomes cheaper → risk appetite increases → funds start seeking new outlets. The market has already been reacting in advance.

The stock market immediately showed signs of movement, with large banks resuming financing for M&A transactions. Netflix's acquisition of Warner is a typical example; such deals of this scale only occur when funding starts to loosen. This indicates that traditional capital markets have sensed a change in the wind.

For the crypto market, expectations of rate cuts usually bring two waves of effects: the first wave is heightened speculative sentiment, and the second wave is genuine capital inflow. We may currently be in the transition period between these two waves.

The next few months are worth close attention, as the market could become very interesting. Stay alert, but also manage your positions carefully.